Greece secured three credit rating upgrades from ratings agency Fitch Ratings after achieving significant public debt reductions and economic expansion, according to a new report.
The international ratings agency reported that public debt reduction served as the decisive factor behind the Greek credit upgrades awarded since 2022.
In its latest analysis examining Greece, Cyprus, and Portugal, Fitch noted that debt to Gross Domestic Product ratios across all three economies declined sharply from their 2020 peak levels. All three countries brought their debt burdens well below pre-pandemic marks, contrasting with the broader Eurozone where debt reduction progress remained far more limited.
Greece recorded the largest absolute debt reduction among the three nations. The country reduced its public debt from approximately 209 percent of Gross Domestic Product in 2020 to 146 percent in 2025.
Fitch projected that Greece will maintain this downward path, bringing the debt ratio down to 125 percent by 2029. Greek public debt currently sits roughly 37 percentage points lower than pre-pandemic levels, whereas total debt across the Eurozone remains approximately four percentage points above pre-crisis levels.
Greece Economic Growth and Primary Surpluses
Strong economic growth played a central role in driving the Greek debt reduction. The Greek economy expanded by 22 percent during the period from 2021 to 2025, compared to approximately 13.5 percent growth for the European Union overall.
According to calculations by Fitch, the growth effect alone accounted for a 36-percentage-point reduction in the Greek debt-to-GDP ratio.
Fitch emphasized that rapid economic growth alone does not fully explain the credit upgrades of Greece, Cyprus, and Portugal. The agency stated that specific fiscal policy, specifically the ability to generate and sustain primary budget surpluses, set these three economies apart from European peers.
The report contrasted their performance with Italy and Spain, which also experienced favorable growth conditions but received only single-notch credit upgrades. Italy has recorded modest primary surpluses since 2024, while Spain has yet to post a primary surplus.
In Greece, marked improvements within the banking sector also contributed to the credit upgrades by allowing Fitch to remove constraints that previously limited sovereign ratings. Greek Minister Pierrakakis noted that early debt repayments are defusing the fiscal time bomb of 2032 right now and avoiding passing financial burdens to future generations.
Fitch Warning on Fading Growth Tailwinds
Despite recent progress, Fitch cautioned that several key tailwinds that powered Greece's economic recovery are gradually losing momentum. The post-pandemic tourism rebound has run its course, funding flows from the European Union Recovery and Resilience Facility will peak in 2026, and negative real financing costs are disappearing.
Fitch noted that as these tailwinds fade, primary budget surpluses will need to carry more of the debt reduction burden. Maintaining those surpluses will become more challenging amid an ageing population, rising defence commitments, and waning political consensus.
Fiscal Lessons for European Nations
Fitch concluded that the experiences of Greece, Cyprus, and Portugal provide valuable lessons for other highly indebted European nations, including Austria, Belgium, France, Finland, and the United Kingdom.
The agency stated that sustained credit rating upgrades are built on primary surpluses maintained over many years and across successive governments, rather than relying solely on favorable macroeconomic conditions.
